The Performance of Service Industries in Canada: A Real Value Analysis

The performance of service industries in Canada has been lower than that of good industries over the last four decades, with noticeable exceptions such as for railways and telecommunication carriers. Service industries were less economically (and technically) efficient in that they generated less output value (quantity) per hour worked (level and growth) or per combined unit of labour and capital (multifactor productivity growth) than good industries. The relative output price of services declined slightly over time compared with goods. At the disaggregated level, changing relative output prices were substantial and proved to be an important factor explaining the relative satisfactory economic performance of many service industries despite their low technical performance. Nevertheless, the output share of service industries increased over that period, sustained, mainly, by the growing recourse of all firms to outsourcing of services.     

Current state of the electrification of Russia

The current progress of electrification in Russia is clearly insufficient compared with G8 countries. At the same time, economy sectors have a high potential for energy saving. The electricity consumption of households depends on their cash income and the growth rate of electricity tariffs.     

The economic performance of the Russian economy in 2006 and a forecast for 2008–2010

This article examines the economic outcome of 2006 and builds a forecast for 2007–2010. The medium-term development risks of the Russian economy are analyzed.     

Service Competitiveness – An Anglo-US Study

This article reports on the latest in a series of international comparisons of management practices and performance outcomes of industries in various countries. Here, it is the service industries in the UK and the US which come under the microscope. Among the companies surveyed, there were more world-class performers in the US than the UK, but also more low performers. The concluding part of the article is diagnostic – the authors also suggest measures which could improve performance.     

Fiscal sustainability and solvency: theory and recent experience in Indonesia

A major challenge for Indonesian economic policy makers is to avoid the recurrence of conditions that could trigger a new economic crisis. One of the important dimensions of this challenge will be to conduct fiscal policy in a way that is sustainable, given the level of interest rates and the rate of growth of the economy. This paper synthesises various approaches to the measurement of fiscal sustainability that have appeared in the economic literature, relates these measures to the fundamental concept of fiscal solvency, and applies the framework to Indonesia over the period 1991–2003. The domestic and foreign debt positions of the central government are treated separately, to capture the influence of exchange rate changes on the relative costs of domestic and foreign borrowing. The empirical analysis indicates that Indonesia has met the fiscal sustainability criterion in recent years, except when the rupiah has depreciated heavily.     

Dutch housing allowances: social housing at risk

This article deals with the vulnerability of the Dutch housing allowance scheme. This scheme can be compared with the British housing benefit. The vulnerability of the scheme has been augmented by the current less favourable economic conditions (stagnating household incomes, increasing unemployment) and the Dutch government's announcement that it plans to reduce housing allowance expenditure. Two scenarios are outlined, which may serve to resolve the danger of exploding housing allowances expenditure in the coming years. If a market‐led scenario is chosen, whereby housing associations strive to achieve market rents, the housing allowance will be transformed into a form of housing voucher, the value of which is not directly related to the actual rental price of the property. In this American‐style model, the value of the vouchers would be linked to a ‘virtual’ rent, say 40% of the average rental price in the region. The housing associations would then lose their special semi‐public status. Under the social housing model, the housing associations would retain their special status provided they aimed to achieve rents somewhat lower than the market level. The housing allowance would remain directly linked to the actual rental price. However, some marked changes would be required to render this system sustainable. The Netherlands cannot avoid having to make this choice. Cet article porte sur la vulnérabilité du régime hollandais d'aide au logement. Celui‐ci est comparable aux prestations britanniques. La fragilité du régime a été accrue par les conditions économiques actuelles moins favorables (stagnation du revenu des ménages, augmentation du chômage) et par l'annonce du gouvernement néderlandais relative à la réduction prévue des dépenses d'allocation‐logement. Sont présentés deux scénarios susceptibles de limiter le risque d'explosion des dépenses d'allocations dans les années à venir. Si l'option choisie est un scénario de marché où les associations pour le logement luttent pour atteindre les loyers du marché, l'allocation‐logement se transformera en ‘bon’ dont la valeur ne sera pas directement liée au montant réel du loyer. Selon ce modèle de type américain, la valeur des ‘bons’ sera fonction d'un loyer ‘virtuel’, soit environ 40% du prix moyen dans la région; les associations perdraient alors leur statut particulier semi‐public. Selon le modèle de logement social, elles conserveraient leur statut, à condition qu'elles cherchent à atteindre des loyers légèrement inférieurs au niveau du marché; l'allocation‐logement serait alors directement liée au montant réel du loyer. Toutefois, pour que le régime subsiste, il faudrait procéder à d'importants changements. Les Pays‐Bas ne peuvent s'épargner ce choix.     

AN EMPIRICAL INVESTIGATION INTO THE IMPACT OF PROFIT SHARING SCHEMES OF EXECUTIVIES ON THE CONTENT OF CORPORATE SUBMISSIONS ON PROPOSED ACCOUNTING STANDARDS

This paper examines the comments submitted by UK companies on 20 proposed accounting standards to test the hypotheses that executives favor standards that increase, or dampen the variance of, accounting profit numbers on which their incentive remuneration is based. Test results were generally as hypothesised but only the profit variance outcomes were statistically significant. Allowing for political environment changes affected only the profit variance results. There was no evidence that the relative monetary size of bonus payments was a significant lobbying factor. No significant differences were found between the lobbying preferences of companies with or without executive incentive schemes.     

CAN INEFFICIENT TRADERS CREATE VALUE?

I examine the aggregate expected profit generated by informed traders of diverse ability in a competitive market. I assume that efficient traders get perfect information on asset values whereas inefficient traders get noisy information. In the presence of order size restrictions, I show that the aggregate expected profit generated by efficient and inefficient traders together can be higher than that generated by efficient traders alone. Thus, inefficient traders can create value in a constrained trading environment.     

Golden Parachutes: Incentive Aligners,Management Entrenchers,or Takeover Bid Signals?

In this paper we investigate the effect of golden parachute (GP) adoptions on shareholder wealth. We control for the potential effect a GP adoption has on the probability that a firm will receive a takeover bid by investigating the wealth effects for firms that are in play when the GP is adopted. We find that announcements are wealth neutral when firms are in play and wealth increasing when firms are not in play when a GP is adopted. The results suggest that GPs have no influence on the success of a tender offer, refuting the hypotheses that they either align manager and shareholder interests or that they entrench inefficient managers. The difference in the results for in-play and not-in-play firms is consistent with the hypothesis that GPs signal an increased likelihood that a firm will receive a takeover bid.